MATTHEWS, N.C.–Helped by a healthy sales increase, Family Dollar posted an 8.1 percent pickup in net income in its fiscal first quarter, to $80.4 million.
Net sales rose 7.6 percent to $2.1 billion, which included an increase of 4.1 percent in same-store sales. The top line benefited from higher shopper transaction value and increased store traffic as measured by the number of register transactions, Family Dollar said in a statement. In terms of product categories, the quarter, which ended on Nov. 26, was led by an 11.4 percent jump in sales of consumables.
That rise in consumables, a low-margin product category, did dampen Family Dollar’s gross margin, which fell 77 basis points to 35.3 percent. Selling, general and administrative expenses, while increasing 4.1 percent in dollars, declined 96 basis points as a percentage of sales to 29 percent.
Looking ahead to the second quarter, Howard Levine, Family Dollar’s chairman and CEO, said December brought a further 4 percent gain in same-store sales and that this momentum should continue through the end of February. For the fiscal year as a whole, Family Dollar has projected a net-sales increase of from 8 to 10 percent, with same-store sales rising from 4 to 6 percent.